Taxation Flashcards
What are capital losses?
Capital losses arise on the sale of non-depreciable capital property, such as land or investments.
What are non-capital losses?
Non-capital losses arise on business income.
What can capital losses be used against?
Capital losses are only deductible against capital gains. Can only deduct capital losses up to the capital gains incurred for the period.
What happen to capital losses when there is no capital gains in the period or there is excess capital losses?
Capital losses can be carried back 3 years and forward indefinitely .
Can you carried back or forward capital losses when there is capital gains in the current year?
No. You must use the capital loss incurred in a year if there are capital gains.
What are non-capital losses deductible against?
Non-capital losses can be deducted against any income.
Non-capital losses can be carried back __ years and forward ____ years.
Non-capital losses can be carried back 3 years and forward 20 years.
Can a portion of non-capital losses/capital losses be carried back and forward?
Yes.
How to compute net income for tax purposes?
NI before tax adjusted for additions and deductions.
How to compute taxable income?
net income for tax purposes less division c deductions.
Do you use NI before tax of NI after tax to compute taxable income?
You can use either, but for NI after tax remember to add back income tax expense.
NIFTP - Add or Deduct: Late filing fees and interest penalties
ADD
NIFTP - Add or Deduct: Amortization
ADD
NIFTP - Add or Deduct: Charitable donations
ADD
NIFTP - Add or Deduct: Meals and Entertainments
ADD back 50% only.`
